Under a draft accord issued by North Korea and five other countries in Beijing yesterday, the reclusive state promised to give up its main bargaining chip in return for energy, economic aid and a US promise not to attack.

President George Bush yesterday gave the agreement a cautious welcome. "Five nations have spoken and said it's not in the world's interest that North Korea have a nuclear weapon, and now there's a way forward," he said after a national security council meeting at the White House.

"It's a step forward in making the world a more secure place. The question is - over time will all parties adhere to the agreement?"

Among the details yet to be hammered out are monitoring and aid payments, as well as the vexed question of whether North Korea can build a lightwater reactor to ease its chronic power shortages.

Although vaguely worded, the joint statement issued by negotiators from the US, North Korea and four other regional players - China, South Korea, Japan and Russia - is seen as a road map towards the denuclearisation of the peninsula.

North Korea said it was "committed to abandoning all nuclear weapons and existing nuclear programmes and returning at an early date" to the nuclear non-proliferation treaty and the safeguard system established by the International Atomic Energy Agency (IAEA).

In return, Washington pledged to respect North Korea's sovereignty and take steps to normalise relations. "The United States affirmed that it has no nuclear weapons on the Korean peninsula and has no intention to attack or invade with nuclear or conventional weapons," the statement read.

A previous US-North Korean agreement negotiated by the Clinton administration broke down in 2002 after Washington claimed that Pyongyang had admitted running a uranium enrichment programme. The North Koreans expelled IAEA inspectors at the end of that year.

The inspectors from the UN agency were delighted at the news of a breakthrough. Mohamed ElBaradei, the head of the IAEA, said he would try to return his inspectors to North Korea as quickly as possible. "The earlier we go back, the better," he said in Vienna. "This is all very encouraging. It constitutes a balanced package that addresses both the security needs of North Korea as well as the concerns of the international community."

White House national security council spokesman Frederick Jones said there was reason to hope this time that the agreement would stick. "The format this time has led North Korea to understand this is more than a bilateral conversation. It's not one voice speaking to the North Koreans. It's a coalition of five all saying the same thing," he said.

Economic incentives were put on the table in the form of an agreement by all six countries to promote cooperation in energy, trade and investment.

Negotiators will meet in November to try to thrash out the most contentious details such as the level of inspections and the scale of the weapons programme. Pyongyang has never tested a bomb, but has boasted that it has a "nuclear deterrent".

US intelligence analysts believe it has enough plutonium for six to eight warheads. Washington initiated the stand-off by accusing North Korea of running a covert uranium enrichment programme. North Korea denies the claim.

Another potential stumbling block is Pyongyang's demand for a light-water nuclear reactor. China and South Korea accept that their energy-starved neighbour has a right to possess such facilities. But the US fears it will be used for weapons.

International aid workers, who feed one-fifth of North Korea's impoverished population, said the accord could pave the way for them to assist economic development rather than merely provide subsistence humanitarian aid.

How did the nuclear stand-off start?

In October 2003, the US accused North Korea of running an illicit uranium enrichment program. It cut shipments of heavy oil, worsening an already dire energy situation. Pyong-yang countered by kicking out nuclear inspectors, withdrawing from a global treaty to stop the spread of atomic weapons and reopening the country's only reactor in Yongbyon.

How much of a threat is North Korea's nuclear programme?

Outside Kim Jong-il's inner circle, no one knows. Although Pyongyang boasts a "nuclear deterrent", it has never tested a bomb. Some analysts suspect North Korea is bluffing because its ability to make a missile-mounted warhead is unproven. But the CIA estimates Pyongyang has extracted enough weapons-grade plutonium from its Yongbyon plant to make more than six bombs.

Does this agreement mean the crisis is over?

No, it is only a road map. The most difficult issues are still to be resolved and the two main parties - the US and North Korea - do not trust each other. Washington is likely to demand a stringent inspection regime. For its part, North Korea is unlikely to give up its nuclear arsenal - the country's biggest bargaining card - without securing significantly bigger concessions in future talks.

Who is going to pay if they do reach a nuclear weapons-for-aid deal?

As was the case in 1994, the big money is likely to come from South Korea, with Japan and Europe chipping in. The US is reluctant to reward North Korea, but it could help with trading opportunities and supporting North Korea's World Bank membership. South Korea is giving billions and it has offered to provide electricity to North Korea's national grid.